Originally Posted by
elZorro
FP, OK, I was wrong, the interest isn't a rebate, it's an expense. Call it what you like, but when you can invest in an operation where history tells you that you are almost certain to get a good (but not spectacular) long term capital gain, that it won't be taxed, but all your expenses and interest costs will be deducted from your income from the asset for the duration, for tax purposes, then it's a bit of a no-brainer when you have the startup capital.
Note that most manufacturing businesses, startups, new technology etc, don't have guaranteed profit records, or surety of capital safety. They can provide stunning returns, also untaxed over the long term, but carry greater risks. These operations also tend to employ more people, with wide-ranging skill bases.
A CGT is designed to change the perception of those with new capital. Would they buy into a farm or commercial building knowing that the stable but average capital gain will be taxed at about 15%, or would they instead look at an investment with a higher possible capital gain? You have noted that in Queensland, commercial property owners that were invested, stay put. It has in effect clamped some of that sector, just as it was designed to do.
New capital is probably going elsewhere, and overall, Australia has more prosperous businesses, better productivity, higher wages.